The yen hit a 40-year low against the dollar. Forty years. The last time the yen was this weak, Madonna released her first album and people thought Chernobyl was just a city in Ukraine they couldn't spell.
Investors are now "on alert" for Japanese intervention. That's financial media speak for "everyone knows the Bank of Japan might do something but nobody knows when so we'll write the same article every day until it happens or doesn't."
The intervention threat is the best part. Japan's going to step in and defend the yen by... doing what exactly? Selling dollars they accumulated by intervening the other direction for decades? The same dollars that keep appreciating because the Fed actually raises rates while the Bank of Japan treats negative rates like a lifestyle choice?
Somewhere right now a retail trader is staring at his phone thinking he can time the intervention. He's got his finger hovering over the buy button. He's read three Bloomberg articles. He follows a guy on Twitter who posts Japanese flag emojis. He's ready.
The technical setup is perfect by the way. The yen is oversold on every timeframe. RSI is screaming. The weekly chart looks like a ski slope. All the indicators are flashing buy signals. Which means absolutely nothing because currency intervention is a political decision made by bureaucrats in Tokyo who don't give a f*ck about your trendlines.
The funniest thing about a 40-year low is that it implies someone was trading currencies in 1986 and lived to tell about it. That person exists. He's probably still short the yen. He's been adding to the position for four decades. His cost basis is a phone number. He will die at his desk.
The Japanese authorities will intervene exactly when your stop loss hits.
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